INDONESIA* Background Capital: Geography: Area: Location:

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1 INDONESIA* Background The Dutch began to colonize Indonesia in the early 17th century; Japan occupied the islands from 1942 to Indonesia declared its independence shortly before Japan s surrender, but it required four years of sometimes brutal fighting, intermittent negotiations, and UN mediation before the Netherlands agreed to transfer sovereignty in A period of sometimes unruly parliamentary democracy ended in 1957 when President SOEKARNO declared martial law and instituted Guided Democracy. After an abortive coup in 1965 by alleged Communist sympathizers, SOEKARNO was removed from power. From 1966 until 1988, President SUHARTO ruled Indonesia with his New Order Government. After rioting toppled Suharto in 1998, free and fair legislative elections took place in Indonesia is now the world s third most populous democracy, the world s largest archipelagic state, and the world s largest Muslim-majority nation. Current issues include: alleviating poverty, improving education, preventing terrorism, consolidating democracy after four decades of authoritarianism, implementing economic and financial reforms, stemming corruption, reforming the criminal justice system, holding the military and police accountable for human rights violations, addressing climate change, and controlling infectious diseases, particularly those of global and regional importance. In 2005, Indonesia reached a historic peace agreement with armed separatists in Aceh, which led to democratic elections in Aceh in December Indonesia continues to face low intensity armed resistance in Papua by the separatist Free Papua Movement. Capital: Jakarta Geography: Area: Total: 1,904,569 sq km Land: 1,811,569 sq km Water: 93,000 sq km Location: Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean

2 Climate: tropical; hot, humid; more moderate in highlands Natural resources: petroleum, tin, natural gas, nickel, timber, bauxite, copper, fertile soils, coal, gold, silver Geography - note: archipelago of 17,508 islands (6,000 inhabited); straddles equator; strategic location astride or along major sea lanes from Indian Ocean to Pacific Ocean Population: 251,160,124 (July 2013 est.) Economy Overview Indonesia, a vast polyglot nation, grew more than 6% annually in The government made economic advances under the first administration of President YUDHOYONO ( ), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in The government has promoted fiscally conservative policies, resulting in a debt-to-gdp ratio of less than 25%, a fiscal deficit below 3%, and historically low rates of inflation. Fitch and Moody s upgraded Indonesia s credit rating to investment grade in December Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2013 faces the ongoing challenge of improving Indonesia s insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of high oil prices. India - Indonesia Relations India and Indonesia have shared two millennia ofclose cultural and commercial contacts. During our respective struggles for independence, the national leaderships of India and Indonesia led by Prime Minister Jawaharlal Nehru and President Sukarno collaborated closely in supporting the cause of Asian and African independence. Later, after the two countries became independent, Prime Minister Nehru and President Sukarno together laid the foundation of the Afro-Asian and Non-Aligned Movement at the Bandung Conference in Since the adoption of India s Look East Policy in 1991, there has been a rapid development of bilateral relations in political, security, defence, commercial and cultural fields. The multifaceted relationship got an added fillip with the signing of the Joint Declaration on Establishing a Strategic Partnership in 2005 during the State Visit of President Susilo Bambang Yudhoyono. High-level Exchanges The fact that there have been as many as eight Heads of State/Government visits both ways since 2000 stands ample testimony to the intensification of bilateral ties. From the Indonesian side, President Abdurrahman Wahid (February 2000), President Megawati Soekarnoputri (April 2002), President Susilo Bambang Yudhoyono (November 2005 and January 2011) visited India. During the State Visit of President Yudhoyono to India in 2005, the two countries signed a Joint Declaration on Establishing a Strategic Partnership. From the Indian side, PM visited Jakarta in 2003 to attend the India-ASEAN Summit in Bali and in April 2005 to attend the Commemoration of the 50 th Anniversary of the Afro-Asian Conference in Bandung. The President of India Smt. Pratibha Devisingh Patil paid a State Visit to Indonesia in November Prime Minister visited Bali from November 18-19, 2011 to attend the India-ASEAN Summit and East Asia Summit. He met President Yudhoyono on the sidelines of the Summit and discussed issues of mutual interest.

3 Economic indicators GDP (purchasing power parity): $1.237 trillion (2012 est.) GDP (official exchange rate): $878.2 billion (2012 est.) GDP - real growth rate: 6.2% (2012 est.) GDP - per capita (PPP): $5,100 (2012 est.) GDP - composition by sector: Agriculture: 14.4% Industry: 47% Services: 38.6% (2012 est.) Agriculture - products: rubber and similar products, palm oil, poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil, fish and its similar products, and spices Industries: petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewelry, and tourism Industrial production growth rate: 5.2% (2012 est.) Electricity - production: billion kwh (2011 est.) Electricity - consumption: 158 billion kwh (2011 est.) Electricity - exports: 0 kwh (2011 est.) Electricity - imports: billion kwh (2011 est.) Crude Oil - production: 912,100 bbl/day (2011 est.) Crude Oil exports: 371,400 bbl/day (2011 est.) Crude Oil imports: 265,400 bbl/day (2011 est.) Exports: $187 billion (2012 est.) Exports - commodities: oil and gas, electrical appliances, plywood, textiles, rubber Exports - partners: Japan 15.9%, China 11.4%, Singapore 9%, South Korea 7.9%, US 7.8%, India 6.6%, Malaysia 5.9% (2012) Imports: $178.5 billion (2012 est.) Imports - commodities: machinery and equipment, chemicals, fuels, foodstuffss Imports - partners: China 15.3%, Singapore 13.6%, Japan 11.9%, Malaysia 6.4%, South Korea 6.2%, US 6.1%, Thailand 6% (2012) Exchange rates: Indonesian rupiah (IDR) per US dollar - 9,386.6 (2012 est.), 8, (2011 est.) 9,090.4 (2010 est.), 10,389.9 (2009) 9,698.9 (2008) State Visit of President Yudhoyono to India in January 2011 During President Yudhoyono s 2011 visit, both sides agreed to have summit level meetings on the sidelines of multilateral events. During the visit, as many as 16 intergovernmental agreements were signed in the fields of trade and commerce, oil and gas, fertilizers, SMEs, marine and fisheries, science and technology, climate and earth sciences, education, media and culture. In addition, 18 business contracts, at a total value of USD 15 billion, were concluded between public and private sector companies from both sides. A Joint Statement, aptly named Vision for the India- Indonesia New Strategic Partnership over the Coming Decade was issued at the end of the visit. Among the significant decisions taken by the two leaderships for further intensification of bilateral ties were to establish an Eminent Persons Group that would develop a

4 Vision Statement 2025 for the India-Indonesia Strategic Partnership; and the setting up of a Trade and Investment Forum, an Energy Forum and a CEOs Forum. The two sides also agreed to promote regular exchanges of Ministerial visits to boost cooperation in mutually identified areas that held great potential for further enhancement of bilateral relations such as oil and gas, coal, power, renewable energy, trade and industry, health, agriculture, S&T, defence, education, law and security affairs and tourism. India announced the introduction of Tourist Visa on Arrival facility for Indonesian nationals during the visit. Recent Ministerial Exchanges In 2011, Ms Mari Pangestu, Trade Minister of Indonesia visited New Delhi on 3 March 2011 to attend the Delhi Dialogue-III. Minister of State for Oil and Natural Gas Shri R P N Singh led an Indian delegation to Indonesia from April 3-6, Minister of Sports and Youth Affairs (IC) Ajay Maken was in Indonesia from May 2-6, Minister of State for External Affairs Shri E Ahamed attended the 16th Ministerial Conference and Commemorative Meeting of the Non Aligned Movement held in Bali from May 25-27, Smt D Purandeswari, Minister of State for HRD visited Bali for the EAS Education Ministers Meeting from July 17-19, She met her Indonesian counterpart on the occasion. External Affairs Minister Shri S M Krishna visited Bali to attend the India-ASEAN Ministerial Meeting, East Asia Summit Ministerial Consultations and ARF Ministerial meeting from July 21-23, CIM Shri Anand Sharma visited Manado, Indonesia to attend the EAS Economic Ministers Meeting on August 12-13, He met his Indonesian counterpart Mari Pangestu on the sidelines. Commerce, Industry and Textiles Minister Anand Sharma again visited Indonesia for the first biennial India-Indonesia Trade Ministers Forum on October 3-4, Agriculture Minister Sharad Pawar visited Jakarta on October 7-8, 2011 to attend the India-ASEAN Agriculture Ministers Meeting. Tourism Minister Shri Subodh Kant Sahay visited Indonesia from January 10-13, 2012 to attend the ASEAN-India Tourism Ministerial Meeting in Manado. A MoU on ASEAN-India cooperation in tourism was signed on the occasion. Minister also had an interaction with tour and travel agents and media in Jakarta on 13th January The Indian Commerce Industry and Trade Minister Shri Anand Sharma visited Jakarta on 4-6th March, 2012 to inaugurate the India Show. He also met with Indonesian Coordinating Minister for Economy Hatta Rajasa, Trade Minister Gita Wirjawan and Industry Minister Hidayat. Smt. D Purandeswari, Minister of State for HRD visited Yogyakarta in July 2012 to attend the EAS Education Ministers Meeting. India-Indonesia held 4th round of Foreign Minister level Joint Commission Meeting on 27th July 2012 at New Delhi. The Indonesian delegation was led by H E Marty M Natalegawa, Minister of Foreign Affairs. The JCM took stock of the developments in India-Indonesia bilateral relationships covering several sectors and also followed up on several outstanding issues between the two countries. Defence and Security Cooperation A mutual realisation of common traditional and nontraditional security challenges has brought India and Indonesia together to closely cooperate in the field of defence and security. Following the signing of a Defence Cooperation Agreement in 2001, both sides continue to have regular exchanges including the exchange of high level visits, ship visits, officers studying in Staff Colleges in either country and joint coordinated patrols in the mouth of the Malacca Straits. Both sides signed an MOU on combating international terrorism in 2004 under which a Joint Working Group on Counter-Terrorism has been set up. The last meeting of the Joint Working Group was held on December 13-14, 2011 in Semarang, Indonesia. Both sides have also signed an Extradition Treaty and a Mutual Legal Assistance Treaty in Criminal Matters. The 19th India- Indonesia Coordinated Patrol (CORPAT) was held in Belawan, North Sumatera from April The first ever platoon level joint training exercise named Garuda Shakti was conducted

5 at the Indian Army s elite Counter Insurgency and Jungle Warfare School Vairengte in Mizoram from 18 February to 4 March The Indonesian National Army (Tentara Nasional Indonesia- Angkatan Darat, TNI-AD) participated in the event. Economic and Commercial Relations Indonesia is India s second largest trading partner in the ASEAN. India is the largest buyer of crude palm oil from Indonesia. Main items of India s exports to Indonesia are petroleum products, telecommunication equipments and parts, hydrocarbons and derivatives, oil seed, motor vehicle for goods transportation, animal feed, cotton, flat rolled product, alloy steel while the main items of India s imports from Indonesia are fixed vegetable fats and oils, coal, copper ores, natural rubber, pulp and waste paper, alcohols and phenols, hydrocarbon, machine tools, medicinal and pharmaceutical products, fertilizers, paper and paperboard, carboxylic acids, dyeing/tanning extracts, other chemical products. India has substantial investments in Indonesia in the textiles, steel, automotive, banking and resources sectors. Foreign investment from India in Indonesia dates back to the 1970s. In recent years there has been a new wave of investment focusing on the mining, the automotive and banking sectors. Major Indian companies operating in Indonesia include the Aditya Birla group which has a viscose fibre plant and downstream units, Essar which has a cold-rolled steel mill near Jakarta and Jindal Stainless Steel which has a factory in Surabaya. There are two Indian motorcycle manufacturers Bajaj and TVS - in Indonesia. The State Bank of India and the Bank of India has branches in a number of Indonesian cities. Tatas own 30% of the two largest coal mines in Indonesia. More than 40 Indian companies are currently mining or exploring coal blocks in Indonesia. Gujarat State Petroleum and Essar have won an exploration license for gas on-shore in Sumatra. Balmer Lawrie has recently signed a JV agreement for manufacturing grease and lubricants in Indonesia. The Spice Group has acquired a cell phone manufacturing company in Indonesia. Godrej has acquired an FMCG manufacturing company in Indonesia. NALCO is currently working on an Aluminum Smelter Project in Indonesia. The Adani Group has signed a Head of Agreement with Bukit Asam, a State coal mining company for constructing and operating a 200-km railway line and a port in South Sumatra. The project is worth US$ 1.6 billion. The Anil Ambani Group has acquired three coal mines and will construct a 233-km railway line and port in the Jambi and South Sumatra Provinces in South Sumatra. The project is estimated at US$ 2 billion. A number of high profile commercial events have been held in Indonesia to give a boost to bilateral Trade and Investment relations between the two countries. In May 2012, India s Madhucon Sirwijaya Power, an energy consortium signed an MoU with State Electricity Company (PLN) to build a $ 455 mn 300 MW power plant in South Sumatra. The Garuda Foods from Indonesia has set up a joint venture in March 2012 with Polyflex Foods in Bangalore to launch products in flavor drinks and chocolate wafer sticks. CII and the Ministry of Commerce and Industry held the India Show in Jakarta from March 6-8, HRD and Other Assistance Indonesia is a major recipient of ITEC (75 slots) and TCS of Colombo Plan (35 slots) scholarships and over 1300 Indonesian officials have attended training programmes in India under these schemes over the past decade. Further, till date, over 500 trainees from the Indonesian Ministry of Public Works have obtained postgraduate degree in Water Resources and Irrigation Management from the Indian Institute of Technology (IIT), Roorkee. Indian Council for Cultural Relations (ICCR) offers 20 scholarships every year to Indonesian students for pursuing higher studies at under-graduate, postgraduate, doctoral and post-doctoral levels in 181 participating Universities and educational institutions all over India under its General Cultural Scholarship Scheme (GCSS). India has in the past, established a Vocational Training Centre in Jakarta and another Centre has been established in Aceh since August An IT

6 Lab was set up in Magelang, West Java and handed over to the Indonesian Military Academy in May India was among the first countries to provide assistance amounting to US$ 1 million in relief supplies to Indonesia following the Tsunami disaster in India also donated US$ 2 million in relief assistance following the major earthquake in Northern Sumatra on 28 March, Two Indian Air Force IL-76 aircraft airlifted the relief supplies to Medan (North Sumatra) on 21st April India delivered US $ 2 million worth of relief assistance to Indonesia after the earthquake in Java in May, A medical team from the Indian Navy also engaged in relief work in the affected area after these disasters. India offered an assistance of $ 100,000 for those affected by Mt Merapi volcanic eruptions and tsunami in Mentawi islands in October People-to-People Contact There is an active cultural exchange between the two countries. The focal points for this exchange are the two Indian Cultural Centres established in Jakarta and Bali. The Cultural Centres organized a Festival of India in Indonesia during the period October to December The Cultural Exchange Programme (CEP) for the period was signed in January 2011 during the visit of the Indonesian President to India As part of event to commemorate the establishment of six decades of diplomatic relations between India and Indonesia, a collaborative dance drama Sri Kandi was staged on 17 May 2011 with Javanese dance group of Didik Nini Thowok of Yogyakarta, 3 Kathak dancers and 2 Chhau dancers from India. A joint India-Indonesia Ramayana ballet performance was held at the Prambanan Temple Complex in Yogjakarta on 9 November A MoU has been signed between ICCR and the University Gadjah Mada in February 2011 to set up a Rotational Chair on Indian studies in the Faculty of Cultural Sciences of the University. There are around 100,000 Indonesians of Indian origin in Indonesia mostly concentrated in Greater Jakarta, Medan, Surabaya and Bandung. They are mainly engaged in trade dealing in textiles and sports goods. There are around 10,000 Indian nationals living in Indonesia including engineers, consultants, chartered accountants, bankers and other professionals. The Indian community is very well regarded in Indonesia, is generally prosperous and includes individuals holding senior positions in local and multinational companies. Electricity Note The electrical power industry in Indonesia is experiencing a high growth in demand. In the last 5 years the demand averaged about 7 to 9 percent per annum. However, due to the lack of infrastructure in the power sector, during , Indonesia still faces a power crisis in various areas. Electrification rates in Indonesia were 70.4% in As Indonesia continues to develop new power plants and upgrade the current generation and transmission infrastructure there exists ample opportunities for power equipment companies across the world. Indonesia s National electric utility PT PLN PERSERO, formerly known as Perusahaan Umum Listrik Negara (PLN), has engineered a fivefold increase in generating capacity since PLN was formed in 1959 with electricity sales of about 845 GWh. In 1980, sales were on the order of 6.5 TWh, and by 2000 sales reached 79.2 TWh, a twelve-fold increase in two decades. Since domestic electric power supplies have generally lagged demand, Indonesia has a disproportionately large auto producer segment with hundreds of diesel engines and gas turbines (along with a few hydroelectric plants) operated by Pertamina at its refineries and chemical plants, and many other companies at their timber and pulp mills, mines and metal works, and factories and other commercial establishments. Electric utility operations were reorganized in Indonesia almost immediately upon independence when the electricity and gas company was taken over from the Dutch. In October 1945, the main utility organization was renamed Djawatan Listrik dan Gas (Electricity and Gas Office) and put under the Public Works Department. by Government Regulation 1945 Number 1/SD.

7 In January 1961, the government established a state company Badan Pimpinan Umum Perusahaan Listrik Negara (BPU-PLN) to manage electricity, gas, and coal operations. In January 1965, this enterprise was divided two companies: Perusahaan Listrik Negara (PLN) for electricity and Perusahaan Gas Negara. In 1972, Perusahaan Listrik Negara became Perusahaan Umum Listrik Negara. In June 1994, PLN changed its status from a state-owned public utility to a private liability company and in 1994/95, PLN was corporatized and created its first two generating company (genco) subsidiaries, PT Pembangkitan Tenaga Listrik Java-Bali (PJB) I and PJB II. In October 2000, PJB I became PT Indonesia Power. PLN has 16 operational areas including four on Java and 11 numbered areas running sequentially from Area I headquartered at Banda Aceh, Sumatra, in the far west to Area X headquartered in Jayapura, Papua. Area Khusus is on Batam Island just south of Singapore while Area XI is headquartered in Denspasar and serves many islands east of Java. The Java Area, which has 70% of PLN s customers, is split into four sections: District Jakarta, District West Java based in Bandung, District Central Java based in Semarang, and District East Java centered in Surabaya. Export Import Data Bank Dated: 08/08/2013 Values in US $ Millions \Year \Year EXPORT 2, , , , , %Growth India s Total Export 185, , , , , %Growth %Share IMPORT 6, , , , , %Growth India s Total Import 303, , , , , %Growth %Share TOTAL TRADE 9, , , , , %Growth India s Total Trade 488, , , , , %Growth %Share TRADE BALANCE India s Trade Balance -118, , , , , Note: Since , Petroleum figures are being computed from Import Daily trade Returns (DTRs) togenetate country-wise/portwise tables. Up to consolidated petroleum import figures were being received from the Petroleum Ministry.

8 Indonesia Embassy, India 50-A, Kautilya Marg Chanakyapuri New Delhi , India Phone: Important Address The Indian Embassy Jl H.R. Rasuna Said, Kav. S-1, Kuningan, Jakarta Selatan Tel /52/57/ Fax , , , Sources 1) CIA World Fact book 2) Department of Commerce - 3) Ministry of External Affairs, India 4) Press Articles 5) 6) Statistik Ketennagalistriken tahun 2011 *All inputs collected for consolidated info by Dr SK Mukherjee